Economy

GM offers buyouts to 18000 of 50000 workers

GM offers buyouts to 18000 of 50000 workers

General Motors on Wednesday posted quarterly profit that was far higher than expected and said its full-year earnings would come in at the high end of its forecast due to strong demand in North America, driven by its new pickup trucks.

The company has hired 17,000 salaried and hourly workers in the past two years and spent $1 billion remaking its offices into modern workspaces.

General Motors looks to be trimming its white-collar workforce.

The company says 40 percent of its 67,000 salaried full-time workers worldwide have been hired in the past five years.

The company increased its pretax profit by 25 percent during the period and posted a net income of $2.5 billion.

"We are doing this while our company and economy are strong", the company said in an emailed statement. The largest US automaker reported better than expected earnings on Wednesday, fueled by strong sales of trucks and crossovers in North America.

If GM determines that there are not enough volunteers for the buyout, the company could terminate employees.

Employees have until November 19 to accept the buyout.

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"We had strong execution despite the challenges that we faced. The voluntary severance program for eligible salaried employees is one example of our efforts to improve cost efficiency", the company said, according to CTV News Canada.

GM has long talked about reducing costs in preparation for an economic downturn.

GM will continue its effort to recruit talent for certain areas of the business it is expanding, namely engineering and technology for its work on self-driving cars, electric vehicles and mobility services and battery production. GM has said it is aiming to save $6.5 billion in "cost efficiencies" through 2018.

Savings from the employee reductions would come in 2019, after the buyouts take effect.

The pricing gains are "absolutely sustainable", GM Chief Financial Officer Dhivya Suryadevara said. He was referring to GM's sale of the European Opel and Vauxhall units to France's PSA Group.

Most of GM's salaried workers are in the US, mainly in MI, at its Detroit headquarters, a huge technical center in suburban Warren, a testing center in nearby Milford, and an engine and transmission development center in Pontiac.

GM reported good third-quarter results, proving that the automaker is "still in a good place in terms of our performance and the future", Morrissey said.

GM shares jumped more than 8 per cent to $36.34, their highest in nearly six weeks.


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